Greens call for levy on big four banks

The Greens are calling on Australia's biggest four banks to start paying a levy in return for the Government support they have received since the global financial crisis struck.

The Greens say the levy would target the Commonwealth Bank, Westpac, ANZ, and NAB - organisations which have been making "record profits".

The Parliamentary Budget Office has estimated a levy of 0.2 per cent on all bank assets over $100 billion could earn the budget $11 billion over the next four years.

The office has costed the policy and does not believe the banks would pass the cost on to consumers.

Greens deputy leader Adam Bandt says the policy is modelled on similar levies in Europe, and is a suggestion put forward by the International Monetary Fund.

Mr Bandt says the big four banks get considerable public support, and they should give something back.

"The Government will stand behind [the banks] if they ever get into trouble [because] they're treated too big to fail," he said.

"They're able to source funds much more cheaply, which they can then turn into expensive mortgages to sell the rest of us."

Mr Bandt says consumers should not be slugged because the levy would not apply to smaller financial institutions.

"It's time to ask the big banks that are making record profits to pay a fairer share back to the community," he said.

"If they turn around and say 'well you ask us to pay a fairer share and we're going to hurt consumers', then that becomes much greater motivation for consumers to vote with their feet and move somewhere else."

The Bankers' Association's chief executive, Steven Munchenberg, argues the policy would do more harm than good for the broader community.

"We're very concerned about the proposal, which is effectively a tax on people's retirement savings because the majority of bank profits actually do get paid to ordinary Australian shareholders or to superannuation funds," he said.

"So if we're going to be reducing bank profitability, we're going to be reducing the payments into superannuation."